Which of the following are potential financial crime-related red flags when obtaining client data? (Choose three.)

The correct answer is B. A client insists on using a personal bank account for business transactions despite being advised C. A new client shows a preference for minimal direct interaction and relies primarily on indirect E. The ultimate beneficial ownership is unclear. Red flags include using personal accounts for business transactions (which can obscure fund tracing), preferring minimal direct interaction (potentially avoiding scrutiny), and unclear ultimate beneficial ownership (which can conceal the true controllers of the entity and…

Risks and Methods of Money Laundering and Terrorist Financing

Question

Options

AA client frequently submits financial statements much earlier than required appearing overly eager
BA client insists on using a personal bank account for business transactions despite being advised
CA new client shows a preference for minimal direct interaction and relies primarily on indirect
DThe client is a publicly listed company but very diversified
EThe ultimate beneficial ownership is unclear

How the community answered

(44 responses)

A
18% (8)
B
73% (32)
D
9% (4)

Explanation

Red flags include using personal accounts for business transactions (which can obscure fund tracing), preferring minimal direct interaction (potentially avoiding scrutiny), and unclear ultimate beneficial ownership (which can conceal the true controllers of the entity and facilitate illicit

Topics

#customer due diligence#red flags#beneficial ownership#business account misuse

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